BT 'changes the game' but at what cost?

£152m deal can transform Premiership finances but puts English clubs on a collision course with European officials

The immediate reaction to yesterday's announcement of a ground-breaking £152m deal between England's leading rugby clubs and the communications company BT was focused less on what the influx of money might buy than on what it might cost. The future of the wildly popular but commercially underpowered Heineken Cup was under serious threat even before the Premiership fraternity struck gold. Now, it is difficult to imagine how it will survive in its present form.

But while officials at European Rugby Cup, the organisation charged with running the elite Heineken and second-tier Amlin Challenge tournaments, were framing their fierce response to the news that the English contingent had unilaterally sold broadcasting rights to their cross-border matches from 2014 – a flexing of financial muscle if ever there was one – the talk in the corridors of Premiership power was of an unexpectedly lucrative deal that will lead domestic league rugby into a more secure financial future, in the short term at least.

According to Mark McCafferty, the chief executive of Premier Rugby, the top-flight clubs can expect a 50 per cent hike in the money they receive from the broadcasting pot. This could yield the best part of £3m a season to the most established Premiership teams – almost three-quarters of the amount they are currently permitted to spend on players.

"It's a game-changing agreement," McCafferty said after concluding an intense round of highly secretive negotiations with the new broadcasters. "BT is a company at the cutting edge of technology and we will develop a broad partnership."

That partnership centres on the live broadcast of between 52 and 69 Premiership matches a season over four years, with comprehensive coverage of the English clubs' summer seven-a-side tournament thrown in. With BSkyB and ESPN out of the domestic game, BT will have the field all to itself – although Premier Rugby hopes to extend its current terrestrial highlights deal with ITV.

There is, however, a "but" here – and it is a very big "but", to be sure. By including rights to European matches involving English clubs in the BT deal, Premier Rugby is indulging in political brinksmanship of the most perilous kind. The immediate reaction of ERC was to ask how the English could sell something that was not theirs to sell. While McCafferty was extolling the virtues of a deal that would increase the money in the pan-European pot to the benefit of all those who participate – the French clubs, the Irish provinces, the Welsh regions, the Italian franchises and the big-city Scottish teams – the people currently running the European tournaments were pointing in the direction of International Rugby Board regulations and explaining just how far outside those regulations the English were putting themselves.

By way of cranking up the pressure, ERC announced a new exclusive television deal of its own – a four-year contractual extension with none other than BSkyB, the long-established broadcasters driven out of the Premiership by the brash new kids on the sports rights block, BT. What is more, insiders pointed out that this had been unanimously sanctioned, as far back as early June, by the full ERC board, on which Premier Rugby is represented through Peter Wheeler of Leicester.

McCafferty was insistent yesterday that Premier Rugby had been perfectly entitled to sell the rights to European matches involving English clubs, and that by doing so the financial fortunes of the Heineken Cup would be considerably enhanced – not just for the Premiership contenders, but for everyone. Significantly, he also said he was confident that if no agreement on changes to the tournament's format and commercial approach was reached and the English made good on their threat to walk away from the tournament at the end of the 2014 campaign, another cross-border tournament would be put in place in time for the new season.

As the elite French clubs have also served notice of their intention to quit the Heineken Cup in two years' time if no satisfactory agreement is reached, it is widely assumed that a cross-Channel competition would be launched. The prospect of this would almost certainly interest the Welsh regions, who have been lost in a financial dark alley for some time. But ERC officials are far from convinced that the French are truly serious about severing links with the existing tournaments and anyway, French law is much more intrusive than the British version when it comes to sporting freedoms. There would be complications galore.

If Premier Rugby sticks to its guns on the broadcasting front and forces a crisis, both the IRB, the governing body of the world game, and the various national governing bodies will have no choice but to involve themselves. Reluctantly, in the case of Twickenham. Relations between the Rugby Football Union and its leading professional clubs have stabilised a great deal since the English boycott of the Heineken Cup in 1999; indeed, they have never been better. But while there is precious little appetite on either side for a battle over broadcasting and participation rights, there may be no avoiding it.

Last night, McCafferty was bullish about his prospects. "We anticipate that this is the beginning of an excellent partnership with BT," he said. "It's an outstanding deal to support the continued development of Premiership rugby and in addition, the value of the European element from our clubs' rights will serve to help the European game in its future competitions. We are committed to finding an agreement including competitions that not only involve teams from the existing countries but also sides from the emerging rugby markets. It is important that the game continues to expand and grow. We have made proposals and we look forward to progressing discussions."

Those discussions, beginning in Dublin next week, will be fraught in the extreme.

"We remain determined to honour our own commercial commitments and to continue our work to further develop the European club game," said an ERC spokesman. Both sides have pledged to play until the final whistle on this one, but only one of them can win.

Who shows what: TV rights in British sport

Football

BSkyB and BT own the rights to 116 and 38 Premier League matches respectively in a deal worth over £3bn, whilst BSkyB will cover the Football League until 2015 in a £195m deal. England home internationals and away friendlies will be shown on ITV, who will show FA Cup games alongside ESPN until 2014.

Scottish Premier League

The SPL is owned by BSkyB and ESPN until 2017 whilst the Scottish Cup will be shown by both BSkyB and BBC Scotland until 2014.

European Football

BSkyB and ITV share the rights to Champions League fixtures up to 2015, whilst Sky owns the rights to La Liga including the Copa Del Rey until 2015. ITV and ESPN share the rights to televise the Europa League until 2015.

The World Cup Finals

The 2014 World Cup Finals will be shown by both the BBC and ITV.

Rugby Union

BT will host Premiership rugby from 2013 including English club’s European fixtures from 2014. BSkyB will show Heineken Cup fixtures until 2014 and England’s autumn internationals until 2015, whilst ITV will show the World Cup and BBC the Six Nations until 2015.

Rugby League

BSkyB will exclusively cover the Super League until 2016 whilst sharing coverage of the Challenge Cup with the BBC.

Tennis

BBC will continue its Wimbledon coverage until 2017 whilst sharing the Australian Open coverage with Eurosport until 2016. Eurosport will host the French Open alongside ITV until 2014 and the US Open together with BSkyB until 2017.

Golf

The US Open, US PGA Tour and the Ryder Cup are owned by BSkyB until 2014, 2016 and 2018 respectively, whilst they will share coverage of the US Masters with the BBC until 2014 and the Open Championship until 2016.

Cricket

England home internationals and County Championship fixtures are owned by BSkyB until 2017 however they have the option of a further two-year extension.

Athletics

The BBC will show both the Diamond league and all UK events until 2014 whilst sharing coverage of the London Marathon with Eurosport until 2018. They also own World Championship coverage from 2015 for two years in conjunction with Eurosport who have a deal from 2013 after Channel 4 relinquishes its coverage.

Formula 1

BSkyB share the rights to show live Formula 1 until 2018 with the BBC.

Other

The BBC will show the swimming championships, rowing championships and own coverage of the Winter Olympics until 2018. BSkyB owns all darts coverage apart from the British Darts Open which is shared by the BBC and ESPN.

Horse Racing

Horse racing events will be shown on Channel 4 up to 2016.

Cycling

The Tour de France will be shown by ITV and Eurosport until 2015.

American Football

American Football coverage is shared by BSkyB, the BBC and Channel 4.

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